HIDDEN COSTS Export financing can pay for itself in countries where the export climate is favorable. In some countries such as China, where the economics currently work against U.S. exporters. U.S. exporters are at a disadvantage.

Vietnam’s Economic Recovery Yields Positive World Bank Outlook

The Country Has Weathered Economic Turbulence With GDP Growth OF 6.5 Percent for 2015

LOW INFLATION, STRONGER DOMESTIC DEMAND, AND ROBUST EXPORT PERFORMANCE MAKE FOR A POSITIVE MEDIUM-TERM OUTLOOK FOR VIETNAM: World Bank report shows Vietnam has weathered turbulence well and will show 6.5 percent growth in GDP and 9.2 percent in exports.

The Trans-Pacific Partnership is expected to generate considerable benefits for Vietnam.

Vietnam’s economy has weathered recent turbulence fairly well, says a recent World Bank report, released today, with GDP growth expected to come in at 6.5 percent for 2015. This performance is underpinned by further recovery in domestic demand, in turn reflecting robust private consumption and investment growth.

Better macroeconomic conditions helped maintain stability in the banking system, according to the report. On the external front, Vietnam’s export performance remains strong, with total exports increasing by 9.2 percent over 2014, thanks mostly to strong performance of manufacturing exports, especially high technology products such as cell phones, electronics, and computers.

“Stronger domestic demand, robust export performance, low inflation and improved confidence have enabled Vietnam to create firmer foundations for mid-term growth.” says Victoria Kwakwa, the World Bank country director for Vietnam. “This is a good time to solidify macroeconomic stability and rebuild policy buffers including efforts to rein in fiscal imbalances and tackle remaining vulnerabilities in the banking sector.”

According to the World Bank report, the medium-term outlook for Vietnam remains positive, with growth projected to strengthen and inflation expected to remain low. But slow progress on structural reform poses risks to growth prospects, while delays in implementing fiscal consolidation could undermine debt sustainability.

Against the backdrop of these uncertainties, the report suggests that sound macroeconomic management remains crucial to rebuild policy buffers and safeguard against future shocks. Fiscal consolidation, structural reforms, and a further build-up of reserves could help reduce vulnerabilities.

“The recently concluded TPP will not only improving market access, but will also serve as a critical anchor for the next phase of structural reforms in Vietnam.” says Sandeep Mahajan, Lead Economist for the World Bank Vietnam.

Among the current TPP signatories, Vietnam—as the economy with the lowest per capita GDP—has unique comparative advantages, particularly in labor-intensive manufacturing. On the economic impacts, simulations suggest that the TPP could add as much as 8 percent to Vietnam’s GDP, 17 percent to its real exports, and 12 percent to its capital stock over the next 20 years. Despite various implementation challenges, the impact of the TPP on Vietnam is expected to be positive.